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Gas Prices Lowest Since 1994

February 27, 1998

WASHINGTON (AP) _ Maybe it is time to bring back the casual Sunday drive.

Gasoline prices are dipping below $1 a gallon in some parts of the country _ indeed a few stations have been spotted below 90 cents _ the lowest since May 1994.

``I don’t think it’s going to last,″ said Matt McKinney of Waukee, Iowa. ``It gives people a little break. It saves a little money here and there.″

The current prices are good news for commuters, but McKinney may be right. Gas prices generally tend to climb in summer when demand increases, said Bill Jackman of the American Automobile Association.

The good news stems from a classic combination of supply and demand; lots of oil is available and less than normal is being used.

``I knew they were going down, but this is the first day I noticed the price was less than the gallons I bought,″ said Toni Walling of Des Moines, Iowa, as she purchased gasoline at 99.9 cents-a-gallon.

But Ronald Mudge of Bondurant, Iowa, was not satisfied. ``It’s not low enough,″ he said. ``There’s a lot of gas out there and someone in the middle is making a whole lot.″

John Strack of Little Rock, Ark., said he was paying about $1.30 in Jacksonville, Fla., before he moved recently. He was filling his sport utility vehicle at $1.01 and said, ``I noticed it drop four or five cents over the last month.″

An AAA survey found the average price for a gallon of self-service unleaded is $1.11 this month, 17.3 cents less than a year ago. That is the lowest national average since May 1994 when it was $1.10.

Thank the Asian financial crisis, El Nino and improved technology, said Mike Shanahan, a spokesman for the American Petroleum Institute.

Asia’s financial problems have reduced the amount of oil being bought in that region, causing a drop in oil prices. In addition, the El Nino weather pattern so widely blamed for storms in California brought a mild winter to the normally colder parts of the country, reducing the need for heating oil. Finally, oil companies have been able to find more oil because of better prospecting techniques.

That means there is a lot of oil available.

Further, the apparent settlement with Iraq may bode well for the future.

``We’re going to get more Iraqi oil hitting the oil terminals and the terminals are full so prices could come down more,″ said economist Donald Ratajczak of Georgia State University.

The Petroleum Institute’s Shanahan noted that local prices depend on a variety of other conditions such as taxes, the need for special air cleaning additives in some areas and the competition _ or lack of it _ between gas stations.

Gasoline is most expensive in the West at $1.24 for self-serve unleaded regular and cheapest in the Southeast at $1.04. The AAA survey found self-serve unleaded averaging $1.16 in New England, $1.11 in the Mid-Atlantic states, $1.06 in the Great Lakes area, $1.05 in the Midwest and $1.10 in the Southwest.

But within the regions there are scattered areas where gas can be had for under $1. These include parts of the Washington suburbs, and, according to a report in Oil & Gas Journal, Atlanta; Des Moines; Detroit; Kansas City, Mo.; Oklahoma City; St. Louis; Tulsa, Okla.; Wichita, Kan.; Houston; Little Rock, Ark.; and Cheyenne, Wyo.

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